AI based Conversion Rate Optimization (CRO)

In digital advertisement, conversion rate optimization (CRO) refers to activities  and systems used for increasing the percentage of visitors to a website that convert into customers, or take a desired action on a webpage. Conversion rate optimization seeks to increase the percentage of website visitors that take a specific action by methodically testing alternate versions of an activity and electing those activities that tend to deliver the highest number of conversions for a given cost. In doing so, businesses are able to generate more leads or sales without investing more money on website traffic, hence increasing their Return on Advertising Spend and overall profitability.

A conversion rate is defined as the percentage of visitors who complete a goal, as set by the site owner. Some test methods, such as split testing or A/B testing, enables monitoring which copy and creative drives better conversion of visitors into customers.

There are several approaches to conversion optimization with two main schools of thought prevailing in the last few years. One is more focused on testing to discover the best way to increase website, campaign, or landing page Conversion Rates. The other is focused on the pretesting stage of the optimization process. In this second approach, the optimization will include significant investment in  understanding the audience and then creating a targeted message that appeals to that particular audience. Only then would it be willing to deploy testing mechanisms to increase conversion rates. 

The reason is naturally the wish to minimise spend on testing and increase spend on actually bringing potential customers to your website.

Amazon is a great example to a company who is doing it right. Research by Marketingsherpa shows that Amazon’s “targeted” approach where offers are targeted and recommended to users based on factors like interest and site activity converted significantly better, resulting in over 200% increase in conversion rates over other methods. 

It is the understanding of successful strategies like Amazon’s and recent developments in AI based Natural Language Processing that opens the door now towards new methods for automating even the production of the “targeted” Ads and consequently the creation of well targeted campaigns that will minimize the testing costs when executing the actual Conversion Rate Optimization processes, be it A/B testing  on the Ads, or on the website landing pages.

Probably the most important reason for the success comes from the fact that improving Ads creative is optimizing for human behavior and mimicking such behaviours is exactly where AI and Machine Learning come into play. Web design, copywriting and analytics interpretation are key for CRO since many changes are either to Ad design or Ad copy. As well, the ability to understand analytics will give ideas on where in the conversion funnel, CRO changes will have an impact, and once made, how impactful where the changes on the conversion goals.

All of these considerations lead to growing understanding the AI and Machine Learning are key technologies  that are capable of monitoring all of these evidence points from Analytics and

Related readings

MarketingSherpa: Marketing 101: What is CRO (Conversion Rate Optimization)?
Wikipedia: Conversion rate optimization
AAAI Technical Track: AI and the Web


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